“90% of revenue comes from satisfied customers,” stated Jason Lemkin at the 2015 Gainsight Pulse conference. Lemkin, a SaaS guru at SaaStr and current managing director of Storm Ventures, speaks from firsthand knowledge of customer success.
Before venture finance, Jason invested extensively in the success of his customers as he built EchoSign from nothing to $100 million in recurring yearly revenue.
While the phrase “customer success” may seem like a recent Silicon Valley catchphrase, SaaS pioneers like Lemkin and organizations like Box and Atlassian believe that it may be the difference between exponential development and failure.
This blog delves into the notion of customer success, highlighting its paramount significance and examining how hyper-growth firms utilize it to propel their exponential expansion.
The Power of Customer Success
Understanding Customer Success
A proactive strategy for making sure consumers get the results they want from your product or service is called customer success.
Customer success is about anticipating requirements, delivering value consistently, and building long-term relationships—as opposed to typical customer support, which is reactive and concentrates on correcting problems as they emerge.
The Shift from Acquisition to Retention
SaaS specialist and Gainsight Customer Success Evangelist Lincoln Murphy draws attention to a key change in the SaaS sector: the preference for client retention above new business. “Over the past eight years, I have assisted over 300 SaaS startups in growing.
I first concentrated on assisting startups in gaining clients. The firms, investors, and founders all evolved as the SaaS sector did, and the emphasis changed from client acquisition to customer retention. It gets very difficult to grow when there’s a drag on growth from losing consumers out the back door. I adjusted to the market, and client success resulted.”
Key Principles of Customer Success
Helping Customers Achieve Their Desired Outcomes
Most of the money you make from a customer relationship occurs after the transaction. The focus is on growing the relationship and retaining the consumer for longer.
For instance, you want someone who is paying you $10 a month for your product to continue doing so for as long as feasible. However, wouldn’t it be preferable if they gave you $10, $12, $15, and finally $20 a month? That is the goal we have for the success of our customers.
You need to make a consumer feel successful to entice them to remain longer and spend more. You have to assist them in reaching their goal. When a user acquires a B2B accounting software package, for example, their goal could be to be ready for an audit.
However, as the client gets older, they might also need to transfer money offshore or lower their taxes. Acknowledging that the wants of customers change with time is essential to keeping them as clients and guaranteeing business success.
Expanding Customer Relationships
Murphy highlights that developing connections is essential to customer success. “Whatever form that transaction takes is irrelevant. What kind of business model you have is irrelevant. It’s fantastic if someone is paying you $10 a month, for instance, for your product.
For as long as feasible, you want them to pay you $10 a month. However, wouldn’t it be preferable if they gave you $10, $12, $15, and finally $20 a month? That’s the goal we have for our customers’ success.”
Businesses may boost customer lifetime value (CLV) and spur growth by comprehending and meeting changing consumer requirements.
Case Studies of Hyper-Growth Startups
Box
The cloud content management and file-sharing service Box is a shining example of how to use client success to drive expansion. Box made significant investments in customer success to make sure their customers got the most out of their services, which raised retention rates and revenue.
Their customer success team’s main objectives are to comprehend client goals, offer specialized solutions, and stay in constant contact with customers to guarantee their pleasure.
Atlassian
Atlassian, a company well-known for tools like Jira and Confluence, credits a significant portion of its success to its commitment to client success.
Through thorough onboarding, continuous support, and useful tools, Atlassian assists its clients in realizing their objectives related to collaboration and project management. This focus on the needs of the consumer has led to a devoted clientele and substantial market expansion.
EchoSign (Adobe)
The core of EchoSign, which Adobe bought, was customer success. Jason Lemkin’s strategy was to make sure that clients were consistently getting value out of the service in addition to being happy.
EchoSign’s development was remarkable, as seen by its focus on customer success. Prior to being bought, the company generated $100 million in recurring revenue annually.
How to Implement Customer Success in Your Business
Building a Customer Success Team
A successful plan implementation requires a committed customer success team. This team’s main goals should be to comprehend client demands, offer proactive assistance, and make sure clients get the results they want.
Support engineers, onboarding experts, and customer success managers (CSMs) are important positions in a customer success team.
Utilizing Customer Feedback
“Your customer success plan may be improved greatly by using customer feedback. Businesses may discover areas for improvement, learn more about customer satisfaction, and make data-driven choices by actively soliciting feedback through surveys, interviews, and social media monitoring.“
Responding to consumer feedback encourages loyalty by showing them that you appreciate their thoughts.
Measuring Success with Key Metrics
Monitoring important indicators is essential to determining how well your customer success initiatives are working.
Among these measures are:
- Customer Lifetime Value (CLV): Calculates the entire amount of money that a client is anticipated to bring in throughout the course of doing business with you.
- Net Promoter Score (NPS): Evaluate the likelihood that consumers would refer your good or service to others to determine the level of customer loyalty.
- Customer Satisfaction Score (CSAT): Evaluate how satisfied customers are with your offering.
- Churn Rate: This represents the proportion of consumers that discontinue utilizing your service or product within a specified time frame.
- Expansion Revenue: Calculates the extra money made by upselling and cross-selling to current clients.
Businesses may see patterns, assess the results of their customer success programs, and make wise changes to their operations by routinely tracking these data.
Drive Growth in Your Business
Customer success is the best-kept secret of hyper-growth startups, as demonstrated by the success stories of Box, Atlassian, and EchoSign. By concentrating on assisting customers in achieving their goals, growing their relationships, and iteratively improving their strategies based on customer feedback, businesses can drive significant growth and cultivate a devoted customer base.
In the words of Lincoln Murphy, “The majority of the revenue from your relationship with a customer happens post-sale.” Businesses that prioritize customer success not only increase customer retention but also open up new income streams and promote long-term growth. When you apply these ideas to your business, you’ll see an increase in income and client connections.
